The share index of companies in the eurozone’s largest economy crashed below 12,000 – levels not seen since April – before staging a small recovery on Friday afternoon.

The DAX has tumbled in recent weeks but the latest threats of nuclear strikes between the US and Kim Jong-un appear to have sped up sell-offs, said experts.

Export reliant firms have been hit as the euro has strengthened against the US dollar.

And Germany’s biggest carmakers Volkswagen, BMW and Daimler have suffered amid a probe into collusion over the diesel emissions scandal.

Now threat of nuclear war between the US and North Korea has pushed Germany share prices even lower.

France’s CAC 40 has also been been punished by investors.

David Madden, market analyst at CMC Markets UK, said: “The tension between the US and North Korea is still dominating the news and it is looming over the financial markets.

“The uncertainty surrounding the situation has been the main driver of the markets recently, and the enormous surge in the volatility index (VIX) tells us exactly what traders are thinking.

“Global equity markets have been severely shaken by the standoff between the two countries, and oddly enough, the European stock markets seem to have been the worst performers.

“The CAC 40 and the DAX have been in decline since May and June respectively, and now the sell-off has accelerated it.”

It comes as President Donald Trump issued a new threat to North Korea on Friday, saying what he called U. military solutions were “locked and loaded” as Pyongyang accused him of driving the Korean peninsula to the brink of nuclear war.

Russia, China and Germany expressed alarm at the escalating rhetoric from Pyongyang and Washington, while the Pentagon said the US and South Korea would move ahead as planned with a joint military exercise in 10 days, an action sure to further antagonise North Korea.